Horizon 2020 and Brexit

A summary of the post-referendum developments is as follows:

1.  Immediately following the result, various matter-of-fact statements were issued by the European Commission, the UK Government and other sector bodies confirming that the UK remains an EU Member State for now, and fully eligible for Horizon 2020 funding.  In practice, these statements offered only limited comfort.

2.  The reality is that for multi-year research projects, which potentially overrun the expiry of any Article 50 notice (so, post mid-2019, say):

• funding and rights to participate for UK institutions cannot be guaranteed at this point in time, for any period post actual "Brexit"; and

• free movement of personnel cannot at this point be guaranteed for the full duration of the project.  This could pose a major barrier to implementation of projects involving pan-European collaboration.

This situation is understandably causing anxiety and a potential barrier to entry, in terms of UK institutions’ participation in longer-term existing, and new, Horizon 2020 projects.

3.  There have been numerous press and anecdotal reports of UK universities being excluded from future funding bids.

4.  As in many other fields, there is speculation as to which “model” the UK could adopt, in terms of future participation in the Horizon 2020 programme (and future research and innovation framework programmes).  This is pure speculation at this stage as there is neither an exact precedent nor any indication, at this point, as to the thinking of the relevant authorities.  What is clear is that access to EU R&D funding will be just one of the many issues which will need to be addressed during Brexit negotiations.

The way forward

In her speech on the 17th January, Theresa May highlighted supporting science and innovation as one of her twelve objectives for the UK's exit, drawing attention to the "breadth and depth of our academic and scientific communities" and stating that the UK will "welcome agreement to continue to collaborate with our European partners on major science, research and technology initiatives."   Details of the nature of the continuing relationship were thin on the ground.  As newly appointed IP minister, Jo Johnson's position remains that "the Government is determined to ensure that the UK continues to play a leading role in European and international research and innovation".

What we can say at this point is that there are 4 main avenues via which the UK might continue to participate in EU research framework programmes, in the long run:

1.  As full EU member – an outlier and hugely unlikely.

2.  As an “Associated Country” – examples:  Norway, Israel, Turkey

Pros – reasonably full access.

Cons – the UK would have observer-only status in relation to setting of research policy objectives.   Also, associated countries are typically not the major recipients of funding.

Realities – would require EU approval and agreement, and is a negotiated settlement so not available as of right.   Associated country status is likely to be dependent on the UK offering free movement of people, unless the EU softens its position in this regard, which seems unlikely based on current messaging and the Swiss precedent (see below).   

Israel is potentially an interesting comparator, in that (as far as the author can see) the general Israel – EU Association Agreement is not conditional on free movement of workers.   But (as discussed in our pre-referendum breakfast seminar), a Brexiting UK is a very different proposition to a country which has never been an EU Member State, and Israel received a significantly smaller share of grant funding than the UK, for the first year of Horizon 2020.

3.  By way of “Partial association” – example:  Switzerland.

For two years Switzerland had partial association to Horizon 2020, participating in the 1st pillar ("Excellence Science") as an associated country, and as a “third country” in the remainder.

The country's associated status was, however, downgraded, following Switzerland’s referendum which backed restrictions on immigration, and its refusal to ratify the protocol on Croatia, granting free movement to the EU's newest member. 

In December 2016, Switzerland was readmitted as an 'associated country', after MPs backed a compromise solution, effectively climbing down from their position on free movement in time for a 31 December deadline which would have seen them expelled from the scheme completely.

The Swiss are unlikely to be pleased if the UK manages to secure Associated Country status (or something equivalent) whilst also having the ability to control immigration from the EU to the UK.

 4.  As a “Third Country” – of which there are two current categories: those automatically eligible for funding; and those which need to meet certain rules.

Pros – is the default option.  UK universities would still be able to apply to participate in Horizon 2020 projects, subject to relevant work programme rules.

Cons – no guarantee of funding; for certain collaborative projects UK institutions would only be able to participate where 3 Member States/Associated Countries (who must have majority control) are involved.

Realities – this is effectively the “rest of the world” category.  Unlikely to be suitable for the UK

What should UK universities do?

• Continue dialogue with BEIS and research councils.

• Consider diversification of international collaborative activity as a holding pattern during the inevitable period of uncertainty, looking to other parts of the world.

• Maintain links with key European partners.  Consider non-H2020 collaborations with alternative funding streams (industry, patient or philanthropic capital, national research councils, etc.)

• Ensure collaborations with Europe and European institutions are structured in a fairly agile/flexible manner, to allow activity to continue and to limit contractual risk during the period of uncertainty.

• Consider EU-based campuses?   Some press reports hinted at this in the Summer of 2016 but this would involve significant re-structuring/expansion and difficult to see exactly how this would help for institutions with a very diverse research base.   Possibly more feasible for individual spin-outs/subsidiaries.

If you would like further information on anything covered in this briefing please contact David Copping ([email protected]; 020 3375 7485). 

This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.

© Farrer & Co LLP, January 2017